Giving you the best advice to help your business grow

Single Invoice Finance has proved to be one of the most effective means by which businesses get to derive cash without having to suffer the hefty consequences that traditional credit brings. How so? That’s what you’re going to find out today.

Having two major options under its belt, Single Invoice Finance can either be int eh form of factoring or discounting.

In factoring, businesses sell the right to collect against a particular receivable to the provider who in turn provides an advance equivalent to at least 80% of its total value. The transaction shifts the burden of collection from the company to the financing institution. The former then uses the cash as it sees fit. The latter on the other hand waits until maturity and collects from the owing customer. Upon completion, the remaining balance less the fees shall be forwarded.

In discounting, businesses use such invoice as security in exchange for an advance received of its value which it can use as it deems proper. The burden of collection remains with the company. Upon maturity and once collection is complete, the entity is bound by terms to repay the financial institution of the advance received plus fees.

Although slightly different, both factoring and discounting provides the same benefits as follows.

For one, they are easier to process. With lesser requirements and the creditworthiness of the customer considered (not the company’s), the application process down to the approval and the cash release is relatively fast. Some financers can even process this in a matter of twenty four hours.

Second, there is only one invoice to be used. Otherwise known as single or selective invoice financing, it is a onetime transaction. There are no contracts involved and the fees shall only apply to one. The entity shall also have the complete control and can choose which invoice to use. How often the service is to be had and when shall also rest in their shoulders.

Third, it’s a good way to inject cash into the system. Because it’s fast, it is a tried and tested method that helps a dwindling cash flow and helps strengthen working capital. It’s also one way to hasten collection.

Lastly, Single Invoice Finance is no debt. It’s not a loan or a credit or a liability. Therefore, it doesn’t have the strings attached to one such as interests and penalties. It is an asset transaction and is reflected in the books as such.

Export funding has become one of the most widespread financing methods that aided a great number of businesses in putting themselves in the realm of international trade. It is a tried and tested tool that delivers the benefits of foreign trading such as growth and market expansion without the often prickly threats of financial risks (e.g. currency, interest rate and credit risks), strict legislations, scrupulous documentation requirements, collection hiccups and liquidity setbacks.

Not only has export funding been a ladder to small and medium scale enterprises and startups but it has also acted as a life saver for businesses in recovery. Even already established organizations find benefits in it, further increasing sales and strengthening profitability in a global scale.

To truly benefit from such financing medium, companies have to plan for its use from start to finish. After all, even a tool as great as it would fail to succeed if used incorrectly. In order to achieve its full potential and maximize the benefits that it gives, here is some expert advice on how to plan an export funding.

First, determine its effects on finances. Is the business really ready for exportation? Before thinking about whether or not to make use of such method, determine if the organization is really ready to trade on the international market. This is no joke and so operations as well as finances must be taken into consideration before anything else.

Second, determine needs and goals. It is crucial to identify the company’s needs in the export trade. Moreover, goals must be set. An endeavor won’t exactly be one if there is no end goal.

Third, identify territorial requisites. Each country that the business wishes to export to shall have its own set of rules and regulations. What these are and how to achieve them must be looked at and examined to determine if they are worth all the trouble and if the benefits of trading in such market will be greater than its costs.

Fourth, weigh out the alternatives. Is this financing medium the best option out there? There are many ways by which entrepreneurs can trade and bring their products overseas and export funding is only one of them. Part of planning its use will have to be scrutinizing if it really is the best option to take.

Lastly, find a trusted export funding company. They must not only be prompt in terms of providing for the invoice advances but must also be seasoned enough to handle overseas transactions. Their knowledge, skills and resources must be beyond par.

Financing is one very sensitive issue that businesses make sure to handle with utmost care and caution. There are many methods and alternatives to choose from, each with their varying uses and set of pros and cons. One of the more popular options out there is what we call Single Invoice Factoring and today we’ll discuss a few sets of dos and don’ts to help everyone master the best use of the said method.

Do understand what it is all about. It would be outright silly to make use of it without fully grasping and understanding its procedures, uses, costs, effects, advantages and disadvantages. A smart and successful businessman thinks before he acts.

Don’t transact blindly. Choose the best Single Invoice Factoring Company in your area. Research well. Ask around for feedback and don’t hesitate to interview and inquire your shortlisted candidates.

Do assess customer creditworthiness. To avoid having any problems with delinquent customers and ultimately your factored invoice, make sure to only extend credit to those who are capable of payment.

Don’t mix it up with discounting. With factoring, the provider is responsible for the payment collection and the transaction is a sale of an asset, the right to collect. With discounting, the company retains responsibility over payment collection and is akin to borrowing with the invoice used as collateral.

Do remember that it is not a loan. It is by no means a liability transaction and therefore produces zero debt, interests and other strings attached to it. It is reflected as a increase in cash and a decrease in receivables instead.

Don’t worry about customer backlash. There is nothing wrong about factoring receivables so customers generally don’t hold it against companies. However, for reasons of avoiding confusion with payment, a confidential arrangement may be made so that customers know nothing about the factoring.

Do use it as you please. There is much flexibility and freedom in the use of Single Invoice Factoring. Companies can use it whenever they want to and as frequent as they would like. The choice of which receivable to use will also be the decision of the business and no one else’s.

Don’t factor each invoice individually. If you find yourself using Single Invoice Factoring for all your receivables, it would be best to switch to Bulk Factoring instead. It’s quite the same except for the fact that the latter advances all receivables as a whole instead of one by one making room for more cost savings.

Spot Factoring is an arm of Receivables Financing that enables business entities to choose a sales invoice and advance its value in exchange for the right to collect against it, all before the owing customer sends in partial or full payment.

Truth be told, it is a very powerful tool that comes with a slew of benefits making it one of the most laudable finance mediums of today. It is used by many entities, regardless of type, size and industry. But just like anything else that involves financial matters, it has to be taken with a grain of salt. After all, there’s no one size fits all method and its effects can be different from one user to the other. Research and analysis has to be done first in order to assess if it really is the method that suits the company’s needs best. With that said, we’re giving you 5 questions to ask before bringing Spot Factoring into play.

1.“Do I understand how Spot Factoring works?”

It is crucial that you do or else it would be impossible to make a good decision. One cannot fully determine its feasibility if one could not grasp its processes, purposes, costs, perks and drawbacks.

2.“Which receivable will I use?”

Spot factoring is a one-time transaction. The company has the liberty to pick which receivable to use and when. Of course, opt for one that’s of significant value and will cover for your needs. Make sure that the customer is creditworthy to ensure a higher approval rate.

3.“Where will the funds be utilized?”

Define the purpose of the fund. One simply cannot advance just because. There has to be some valid reason behind it and once the cash is received, it has to be allocated accordingly to ensure maximum use and zero wastage.

4.“How fast will the cash be released?”

The strongest charm of Spot Factoring lies in its ability to derive cash almost instantaneously. Many providers are able to do so within twenty four hours but this isn’t true for all so inquire first before you decide on anything.

5.“Is the provider trustworthy?”

Always choose a quality Spot Factoring provider. Research the area for companies that offer the service and run a background check on them. Look for any reviews and feedback and pay them a call and a visit to discuss available services and terms. Don’t jump on the first provider you find.

Exportation in its simplest explanation means sending goods for sale or exchange in other countries. In business, such transaction is a sign of growth and expansion. You’d think that if given the chance, everyone would jump in on the opportunity without batting an eyelash. Unfortunately, that’s not how reality works. There are many factors to consider before the jump. Foreign trade is no joke. It is serious business to say the least and one of its most challenging facets has something to do with export funding.

When a business decides to place itself in the foreign market, it doesn’t come for free. There are costs to it. First of all, the company will have to study and make various researches regarding a particular country’s market. Products may have to be modified to suit the market’s needs, culture, traditions and preferences. Second, part of operations will have to delve into the international scene which obviously comes with costs. And let’s not forget about freight costs, currency exchange differences, tariffs, taxes and duties. All these and more will require adequate export funding.

With that said, businesses need to gear up in terms of finances. Below, are some tips we’ve gathered from the experts.

·Always start with a plan. – This is the first step to everything. Make sure that you don’t dive head first without a strategy otherwise you’re only opening yourself up for losses and turmoil. Exporting is no joke as we’ve said earlier. This only means that ample caution must be taken when engaging in it. A plan not only acts as a map but also serves as a reminder to keep your eyes on the prize.

·Know your sources. – There are many options when it comes to financing. The key here is to determine which ones would bring in the most benefits at the least cost and disadvantage. Research, examine and analyze before you choose.

·Estimate expenses. – Make a careful analysis of your needs to come up with an effective estimate of possible expenses. This should aid in determining the costs to expect and prepare for.

·Budget wisely. – When resources have been acquired, make sure that they are allocated as efficiently and effectively as possible. This is where budgets and financial plans come in handy.

·Be prudent. – When using your export funding, practice prudence. In accounting, this is where you expect the worst where expenses are best overstated and income understated in cases of doubt. This should prevent the likelihood of shortages in funds and overestimation of sales.Visit http://workingcapitalpartners.co.uk.

What happens when you need to get hold of emergency funds real quick? How does one solve this financial dilemma? Luckily for us the team at Working Capital Partners is here to help us find the answers.

Truth be told, financing is a tricky and sensitive but equally important aspect to business. After all one cannot run a company without the cash to do so. How are you going to provide for your expenditures?

There are many sources of funds such as equity from shares of stock or the owners themselves. There is the use of retained earnings too to provide for certain ventures. Moreover, entities can reinvest their profits back into the business. Of course, let us not forget forms of credit such as bank loans and mortgages to name two.

Now, there will come a time when such sources are not available or not feasible given the situation. There will be emergency needs that need immediate source of cash that can release it within a few days’ time or weeks.

In times like that, businesses can take on other forms of financing that will enable them to generate cash real quick. Below are three of them.

Invoice Factoring – This method allows entities to raise funds from their unpaid customer invoices. In exchange for the right to collect against them, the factoring company shall issue an advance equivalent o 80-95% of their value. The remaining percent shall be withheld and released only upon full collection from owing customers less the fees. This basically hastens the collection process and can take as fast as 24 hours.

Receivables Discounting – Quite like factoring, it enables the release of advance equivalent to one’s receivables. However, what differs is that the collection function shall be retained by the company. After completion, it then goes on to pay off the financing agent plus fees. It likewise can be arranged in a day’s time depending on the circumstances at hand.

Interim Financing – This is a type of short term loan taken out in cases where a permanent financing medium has already been employed but is seen to come later than is needed. The interim loan shall provide for the immediate needs and shall then be closed out by the main fund line once it arrives.

So which among the three options suggested by Working Capital Partners fit your needs?

You may have already heard about export finance and export overdraft but never really got to know what it is and what it does. Well today is the day that you find out so go on and read. You need to add to the cornucopia of your knowledge. Besides, you never know if you might actually need one in the future. It’s always best to be aware of your options.

First of all, it is designed to be furnished by small and medium scale enterprises that delve into the export market. Moreover, it is also used to support a growing entity’s cash flow needs especially when its export operations are deferred or prevented by strict supplier terms and the delayed payment by owing customers.

By now, you may already know that cash flow problems can deter and derail any company’s plans of expansion and growth. Even its regular operations can be disturbed and made unfeasible. Just because sales are up does not exactly denote the presence of liquid resources and actual cash. Plus, most suppliers have requirements that have to be complied with first in order for them to extend credit to companies.

The aforementioned dilemmas can be a huge hiccup to the export plans of a business. The opportunity is great and the returns are promising but there are road blocks. So how do you remove these boulders from your path? The answer is export financing.

Export financing helps entities sell overseas and export their goods without the complications of the usual paperwork and the risks of not being able to collect. As an entrepreneur, these two are huge dissuasions to one’s plans and if they can be overcome with then the better.

In an export financing arrangement, payment for the goods and/or services provided are attained with the help of a financial facility or company that have expertise on the said service. Companies can go on and export their offerings in other countries and the facility will take care of the collection and in the assurance that documents, paper trail and collection are achieved. Of course, a fee will be required in exchange of the service but knowing the nitty-gritty and bloody transactions and requirements that one would have to do if one chooses to do the process on their own, the fees are very well worth it. After all, you have to aspire for growth and you can’t do it if you stay in one place forever.

In business, money matters. These financial resources are essential for a number of things. You need it to purchase raw materials, to pay for employee salaries and wages, to pay the lease and all other operational as well as general and administrative expenses. Additionally, funds are needed to provide for expansion and other corporate ventures. Add in to the pile emergency and contingency cases which make it imperative for businesses to always plan the management and use of this limited resource. But when worse comes to worst and an emergency pops out, where can entrepreneurs get their needed funds? The answer is through receivables financing.

Remember that even if sales mean profit, they do not always mean cash. Customers and clients do their purchase either through cash or through credit and in many cases, the latter prevails. The problem with this though is that even if customers do pay, the money is not always readily available for use should the entity need it. It will take time before it will be actually realized and held by the business.

The only way to hasten up the collection process is through funding your expenses or deriving cash from the unpaid receivables or so called customer invoices. This is achieved through receivables financing.

What happens in this type of funding method is that entities get to receive majority of the value of the receivables in advance before customers actually pay in full. Oftentimes, financial providers will give about eighty to ninety five percent of the receivables’ value with the balance less agreed upon fees only to be forwarded after full collection has been received from the owing customers. To put it simply, it’s like selling off your customer invoices to an institution, receiving the amount equal to its value and then going on with business as usual.

Another good thing about using receivables financing especially during emergency cases is the fact that they are very quick to process. In as fast as twenty four hours, the fund can be provided already. Additionally, even struggling and losing companies can make us of it as receivables finance providers do not bank on the financial status of the businesses seeking it but rather on its owing customers. No financial reports will even have to be submitted for perusal and one’s credit history and grade will have no impact on the application.

Knowing the types of business lending options and for when and where they are used is beneficial to all companies even if you are not looking for a loan option at the moment. Plus, it pays to be prepared. You never know when you might need one so it is best to keep abreast and know which alternative will be most beneficial for you and your company. So let’s proceed and discuss briefly the different types to it.

EXPORT FUNDING is the solution to help businessmen who are in the export industry. What export funding facilities do is that they provide you with the cash flow to support your exporting operations like sourcing, manufacturing and delivery of goods overseas.

TERM LOANS are those that come with a predetermined interest rate and are to be repaid either monthly, quarterly, semi annually, yearly or depending on the credit terms. These are by far the most common option in the list and are those that are often used in the corporate world by those with sound financial resources and established small, medium and large companies.

SECURED ones are those that come with an asset used as collateral or as a form of guarantee in the event of non fulfilment of obligations as stated in the agreement or contract. Such assets may be limited to those that are company owned or may encompass and include personally owned assets of the owners. This is common where the values to be borrowed often include a rather large amount.

COVENANTS are those that come with a condition to the borrower where failure to comply gives the lender the power and the right to demand full payment of the amount owed in full. Such covenants are arranged on a case to case basis. These may be a requirement to maintain equity, a certain cash flow level, limited allowable other loans and the like.

PERSONAL GUARANTEE is where the lender provides a personal guarantee for the business using his or her own credit history for qualification instead of that of the business. This one can still be beneficial but may be disregarded by companies with multiple owners as the risks to their personal assets are out there.

Moreover, there are many other business lending options for your business. It would be better to seek advice from your counsel or financial consultant as to what options can provide the most advantage on your part with the most minimal risks and costs. Having the resources to make a company operate is a key player in ascertaining success. It may be challenging and hard but with the right plan and strategies, you will surely get the results you want.

When it comes to raising capital for a company, a popular option among many entrepreneurs is single invoice or spot factoring. This is nothing to be surprised at as such funding method do have its perks. To name a few, here is a brief list:

• It is a quick and simple process.

• It improves cash flows without an added debt.

• It does not involve interests and therefore costs less.

• It leverages instead on customer’s financial status.

• It makes the company more liquid.

• It is not a form of a loan.

Now that you’ve had a little refresher, here a few ways to help you land on the good spot factoring companies to suit your financial needs:

• Invest on a good research.

We all know that in everything, planning is a key to success. Failure to do so can be catastrophic. Research is part of planning and it is therefore a must if you are looking at spot factoring and its service providers. Before getting on the engagement, you first have to understand its key concepts and how much of an impact it can do your company. Furthermore, you have to research well on who are the best factors in town, who are suited for your business and its industry.

• Ask your consultants and business advisers.

Do remember to go and talk with your advisers and consultants. Your financial analysts may have an opinion on the matter too. With the nature of their job, it is likely that they know of a few financial institutions that are in good standing and provides the best services. Also, they will be able to guide you in choosing certain options as well.

• Get some professional, reliable and unbiased references.

When asking around from colleagues, businesses partners and from acquaintances in the industry, see to it that their recommendations are free of bias. Their opinions should be backed up by experience and knowledge. For sure, some of them may have already subjected their invoice to spot factoring. Ask them about their experiences both good and bad. Pick up some useful information.

• Go on the World Wide Web.

Of course, the internet goes a long way. You can easily find spot factoring companies by simply typing on the search bar. To benefit best from this, make sure that you have read all the necessary terms, conditions and other related information to help you get to know these entities best.